2 suburban men indicted in Ponzi scheme
A federal indictment has been returned against two men who allegedly fraudulently raised more than $9 million from 25 real estate investors but used the funds for their own personal use and to pay off earlier investors in a Ponzi-type scheme.
Marcin Malarz, 39, formerly of Lake Forest, and Arthur Lin, 48, of Palatine, each were indicted on three counts of wire fraud.
According to the indictment returned by a federal grand jury Thursday, Lin, who served as a branch manager of a LPL Financial Corp., office in Itasca, was also an officer of Malarz Equity Investments LLC, managed by Malarz, which bought apartment buildings and converted the units into condominiums. Between November 2005 and April 2010, Lin recruited some of his clients to invest in Malarz, and in some cases, convinced clients to obtain home equity loans or liquidate their brokerage investments to obtain the capital necessary to make the investments.
The two made false representations about how the funds would be used, the solvency of the business and Malarz’s ability to personally guarantee the investments, the suit states. In addition, Malarz spent $2 million of the funds for personal use, including a Mercedes automobile, and additional investor funds were paid to Lin’s wife, the indictment alleged.
The indictment seeks $5.5 million, the estimated loss to investors, as well as Lin’s homes in Palatine and Barrington.
Lin did not immediately respond to a request for comment. According to the Justice Department, Malarz is a fugitive and believed to be living in Poland.
Lin’s arraignment date has not been determined.
The Securities and Exchange Commission filed its own civil enforcement action against Malarz and Lin, as well as another man, in December 2011, alleging that the three fraudulently raised almost $14.4 million from at least 43 investors between September 2006 and at least January 2009. In January 2012, Lin and his wife, Gloria, entered into a settlement with the SEC, without admitting or denying the complaint’s allegations.
mepodmolik@tribune.com | Twitter @mepodmolik
Marcin Malarz, 39, formerly of Lake Forest, and Arthur Lin, 48, of Palatine, each were indicted on three counts of wire fraud.
The two made false representations about how the funds would be used, the solvency of the business and Malarz’s ability to personally guarantee the investments, the suit states. In addition, Malarz spent $2 million of the funds for personal use, including a Mercedes automobile, and additional investor funds were paid to Lin’s wife, the indictment alleged.
The indictment seeks $5.5 million, the estimated loss to investors, as well as Lin’s homes in Palatine and Barrington.
Lin did not immediately respond to a request for comment. According to the Justice Department, Malarz is a fugitive and believed to be living in Poland.
Lin’s arraignment date has not been determined.
The Securities and Exchange Commission filed its own civil enforcement action against Malarz and Lin, as well as another man, in December 2011, alleging that the three fraudulently raised almost $14.4 million from at least 43 investors between September 2006 and at least January 2009. In January 2012, Lin and his wife, Gloria, entered into a settlement with the SEC, without admitting or denying the complaint’s allegations.
mepodmolik@tribune.com | Twitter @mepodmolik
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